There are many influences on United States treasuries, which are a worldwide safe haven for capital. They are not only affected by US monetary policy, but also worldwide economic and geopolitical events.

GlobeSt.com: With interest rates rising, how can owners and investors adapt their approach to structuring deals?

Ward: After the most recent increase, it's no secret that rates are anticipated to continue to rise. That said, with potential future rate increases on the horizon, there are several strategies that active investors can implement to maintain either current cash-on-cash or long-term hold rates of return.

These strategies include:

• Providing more equity, and therefore lower, more conservative loan-to-value ratios in the 50% range. In most cases, this places the pricing lower than the more traditional 65% to 75% loan-to-value request.
• Investing in slow-recovering or tertiary markets, since this can result in higher returns.
• Placing shorter-term loans at three to five years, rather than fixing the rate for a 10-year term.

GlobeSt.com: What advice do you have for owners and investors who are concerned about rising interest rates?

Ward: We have all been the beneficiaries of low interest rates for many years. For example, we've been able to help clients retire 6% and 7% loans with new loans in the high-3% range. We have helped our clients acquire new investment properties with loans in the in the high-3% range, providing double-digit cash-on-cash returns.

If rates do increase more than 50 to 100 basis points, there will be an adjustment period for expectations to level. That said, the rates for many of the loans maturing today were originated at the height of the market in 2007 and were underwritten with coupon rates in the 5% to 6% range.

This means that even with a 100-basis-point increase, we do not anticipate any major concerns about refinance risk and believe that owners and investors will be able to retire maturing loans at rates that remain attractive.

However, owners and investors that want to lock in rates now before any future increases can use a foreword future funding commitment. For well-conceived, well-performing properties, owners can procure a future commitment from six to 18 months out for premiums above today's current rates, ranging from 25 to 75 basis points.

GlobeSt.com: Do you anticipate interest rates will continue on this upwards trajectory beyond 2017, or remain at relatively low levels over the next few years?

Ward: We do see interest rates rising but anticipate that the increases will be modest over the next 12 months. We see this administration as supportive of an economy that will continue to expand. A reasonable cost of capital is crucial for that health.

However, as we mentioned above, we have seen abnormally low rates for many years. Therefore, if we see interest rates in the 5% range, this is historically still a healthy rate where the real estate industry can thrive.